Senate Republicans on Tuesday released a $43 billion two-year budget that puts an additional $1.8 billion toward education, paid for, in part, by a statewide property tax that ultimately would replace local district levies.
The budget plan — which spends about $5 billion more than the current two-year budget — also relies on about $200 million in transfers from other accounts and spending cuts in some state programs. The plan was to move quickly to the Senate Ways and Means Committee, which was to hold a public hearing Tuesday, and the full chamber could vote on it as early as Thursday.
Of the changes in property tax levy associated with the plan, the AP writes,
Republican Sen. John Braun, the chamber’s key budget writer, said that 83 percent of taxpayers would have lower property tax rates under the plan.
Collective bargaining agreements, as expected, are not funded in the plan.
The Senate budget puts additional money into mental health and higher education, but it rejects collective bargaining agreements with state employees that would have cost the state about $500 million over the next two years. Instead, the budget proposes funding for a $500 raise for all state agency employees, including those in higher education, starting July 1, and another $500 raise on July 1, 2018. That change would cost the state about $90 million over the next two years.
From the highlights of the Senate Republican plan,
The proposed Senate Chair budget for the 2017-19 biennium spends a total of $43.0 billion Near General- State and Opportunity Pathways and represents approximately a $5 billion increase from current spending levels in the 2015-17 biennium (after adjusting for the 2017 supplemental changes).
Pursuant to the four year balanced budget methodology, the projected spending level for the 2019-21 biennium is $50.0 billion. This is the net impact after making both policy level additions and achieving savings from current law requirements.
The spending plan leaves an unrestricted balance of $860 million at the end of the 2017-19 biennium and meets the four year balanced budget requirements by leaving an unrestricted balance of $127 million at the end of the 2019-21 biennium.
Some of the larger policy level increases are: (1) $1.8 billion in 2017-19 ($5.9 billion in 2019-21) for the net changes associated the replacement of the K-12 prototypical school funding allocation model with a per pupil guarantee model; (2) $275 million in 2017-19 ($376 million in 2019-21) for state employee and non-state employee compensation increases; (3) $95 million in 2017-19 ($129 million) for staffing and other increases in the state mental health hospitals and for developing additional community options; and (4) $75 million in 2017-19 ($88 million in 2019-21) for additional higher education enrollments, maintaining the state need grant, and additional medical school funding.
With respect to revenues,
The largest resource item is associated with the K-12 legislation that converts to a pupil guarantee funding model and imposes a new local effort levy by the state on behalf of school districts at a uniform rate. Based on the assumed tax rates, the new local effort levy is expected to generate $1.5 billion in the 2017-19 biennium and $4 billion in the 2019-21 biennium.
The Senate budget also assumes legislation that would appropriate $700 million from the Budget Stabilization Account for contributions toward the unfunded liability in the PERS 1 retirement system. As a result of the actuarial savings associated with this earlier payment, a surcharge on all employers based on the difference in lower contribution rates is imposed. This is expected to generate $56 million in the 2017-19 biennium and $171 million in the 2019-21 biennium.
The Senate budget also assumes $251 million in the 2019-21 biennium from legislation permanently redirecting revenue sources from the Public Work Assistance Account (PWAA) to the Education Legacy Trust Account. Additionally, $127 million in the 2017-19 biennium and $20 million in the 2019-21 biennium are assumed to be redirected from PWAA loan repayment resources. The Senate Chair budget leaves sufficient PWAA resources for approximately $100 million in new projects in the 2017-19 biennium and $100 million in new projects for the 2019-21 biennium.
Here’s the balance sheet: